ICM Registry Answers Hustler & Trademark Holders: You Can’t Sue Us

The ICM Registry published a white paper today  entitled .XXX Domains and Trademark Issues.

The paper seems to answer  threats like the one that came from Hustler last week that seemed to indicate that trademark holders are somehow going to try to hold the ICM Registry liable for trademark infringement.

Last week Hustler President Michael Klein said: The ICM registry is “prohibited from registering or selling to a third party any .XXX domain names that contain the famous Hustler trademark or other Hustler-related trademarks.

This paper seems to be a response to that threat and the answer from ICM is clear:

You can’t sue us.

Here are the highlights from the 7 page report

“This White Paper briefly sets forth the history of the top-level domain (“TLD”) registry system, and how ICM’s .xxx domain name registry (the “Registry”) fits within the larger domain name system overseen by the Internet Corporation for Assigned Names and Numbers (“ICANN”).  It explains the Registry’s procedures to address conflicting trademark claims, and outlines basic principles of law that govern this area.”

“Some  domains  are  defined  by  category  and  subject  matter,  while  others  are unrestricted, like .com.   The various domains have adopted different procedures to deal with potential claims that a domain name might infringe a trademark.   These have included sunrise periods, claims periods, and other mechanisms.  All domains must adhere to ICANN’s Uniform Domain Name Dispute Resolution Policy (“UDRP”).”

“ICM Registry has adopted more extensive protections for existing domain name holders  and  trademark  owners  than  ever  implemented  by  any  previous  registry. ”

“Unlike other registries, ICM is offering a dual sunrise period, for both adult industry members with existing trademarks and domain names and other trademark owners who may wish to prevent the use of domain names incorporating their trademarks within  the  .xxx  space.”

“Also,  ICM  has  added  new,  robust  dispute  resolution procedures to address potential trademark infringement, including a Rapid Evaluation Service to resolve disputes quickly.”

“ICM Registry’s trademark protection policies are far more extensive than required by law.”

“Courts have held uniformly that the mere registration of a domain name does not amount to infringement of a mark similar to the name.  They also have made clear that neither registry operators nor registrars are liable for infringement, dilution, or Anticybersquatting Consumer Protection Act expressly immunizes both registrars and registries from liability for registration of domain names.  No court has ever held that a domain registry, which is a step removed from the registrars, can be held liable for the registration of a domain name incorporating another party’s trademark.”

“The  .xxx  domain  is  an  industry-specific  TLD,  approved  by  ICANN.”

“The  Registry accepts applications for new domain names under the .xxx extension, and manages the database of such domains.  Like other industry-specific registries, the Registry limits registrations to those applicants verified as members of the designated industry.”

“In this case, the Sponsored Community  is  defined  as  individuals,  business,  entities,  and  organizations  have  voluntarily agreed  to  comply  with  all  Policies  and  Best  Practices  Guidelines  promulgated  by  the International Foundation for Online Responsibility, and either (a) Provide Online Adult Entertainment intended for consenting adults; (b) Represent Providers; or (c) Provide products or services to Providers and Representatives.”

“Unlike other registries, ICM Registry is offering a dual sunrise period, for both adult industry members with existing trademarks and domain names and other trademark owners who may wish to prevent the use of domain names incorporating their trademarks within the .xxx space.   Also, ICM has added new, robust dispute resolution procedures to address potential trademark infringement.  We believe this makes the Registry the most advanced, responsive and fair domain name registry that has yet been introduced.  Set forth below are further details on our policies and procedures.”

“The Registry’s verification and sunrise provisions are intended to be more comprehensive and stringent than any ever employed by a domain registry.  In terms of verification, the Registry’s Membership Application Process is designed to confirm the status and validate contact information for prospective registrants who are members of the Sponsored Community.” “With respect to the sunrise provisions, members of the Sponsored Community may apply during the sunrise period to register .xxx domains corresponding to registered trademarks and existing domain names in other TLDs.”

“If more than one sunrise application is made for a name by  different  applicants,  all  such  applicants  for  that  name  will  be  notified  of  the  other applications.   In the event any applicant proceeds with a registration request after such notification, that applicant will be deemed on notice of the intellectual property claims submitted by the other sunrise applicants.”

“An auction will be held to resolve competing claims from parties that proceed with registration requests after being notified of other applicants for the same domain.”

“Of course, all registrants of domain names will be subject to the UDRP. ”

“In addition to these procedures, ICM will implement two new methods to prevent abusive registrations.  The Charter Eligibility Dispute Resolution Procedure will be available to challenge any registration by an entity that is not a member of the Sponsored Community and therefore not qualified to register a resolving name in the .xxx TLD. ”

“Separately, under the Rapid Evaluation Service, independent experts will make determinations, in certain cases within 48 hours, for claims involving well-known or inherently distinctive marks.”

The white paper then when it to a long discussion of how A registry and ICM in this particular case is not liable for trademark infringing domain names:

“It has been suggested – perhaps carelessly – that if any domain name is registered on the Registry by a registrant that incorporates a term or terms in which another party claims to hold pre-existing rights, ICM would be subject to legal claims for trademark infringement, unfair competition, and the like.  There is no authority for this astonishing claim.  United States federal courts have been exceedingly clear in holding that neither domain name registries nor registrars are liable for the mere processing of domain name registrations.  As one court presented with such a claim explained, “Congress did not cause defendant as a domain name registrar, or as keeper of the registry, to be subject to civil liability,” because if it had done so, “it would cause the domain name registration system in its entirety not to be feasible.”

The registration of a domain name containing another party’s trademark in and of itself is not an infringement.

“In this regard, the registration of a domain name that incorporates a trademark “is not the use of the mark in connections with goods or services.”

“Under the Anticybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d) (“ACPA”), enacted after the Lockheed case, registration of a domain name with a “bad faith intent to profit from  the  mark”  may  constitute  a  violation  of  the  Lanham  Act  in  certain  circumstances. However, courts have made clear that “none of the conditions and conduct listed [in the ACPA is] applicable to a person functioning solely as a registrar or registry of domain names.”

“A registrant may have numerous defenses to claims of cybersquatting, including but not limited to fair use, the existence of a license from the trademark owner, independent trademark rights in other classes of goods and services or geographic areas than the plaintiff trademark owner, and the like.”

“Courts have held unequivocally that registrars are not liable for the mere act of registering a domain name on behalf of a customer, because “acceptance of domain name registrations is connected only with the names’ technical function on the Internet to designate a set of computers.”5   That is, registrars are not involved in the decision of a registrant to select  a domain name that incorporates someone else’s trademark.”

“Given the various valid reasons a registrant might have to register a domain name even where some other party has a trademark in the particular term, a registrar cannot be in the position of determining competing claims.”

“In some cases, courts do find that a party that induces or contributes to another party’s trademark infringement can be held liable under a theory of secondary liability.  However, this theory simply does not apply where a registrar takes no action other than accepting the registration.  The courts have found that knowledge of infringement cannot be imputed to a registrar even after the registrar receives notice of the existence of another party’s rights, in light of the inherent uncertainty with respect to the scope of trademark rights, and the mere assertion by a trademark  owner  that  a  domain  name  infringes  its  mark  is  not  sufficient  to  impute knowledge of infringement.”

“Moreover, the domain name system is global, while trademark protection is limited geographically.  Neither a registry nor a registrar can be expected to act as the arbiter of regional disputes.  This is why ICANN devised the UDRP.”

The ACPA expressly immunizes both registrars and registries from liability for registration of domain names:

“”A domain name registrar, a domain name registry, or other domain name registration authority shall not be liable for damages under this section for the registration or maintenance of a domain name for another  absent  a  showing  of  bad  faith  intent  to  profit  from  such registration or maintenance of the domain name.”

“The courts have confirmed the scope of this immunity, holding that “domain registrars are granted immunity for registering or maintaining a domain name for another.”

Finally, no court has ever held that a domain registry, which is a step removed from the registrars, can be held liable for the registration of a domain name incorporating another party’s trademark.   Indeed, at least one court unequivocally has held that in undertaking its function as a registry, a registry operator cannot be held liable for infringement.”

“In some cases, courts do find that a party that induces or contributes to another party’s trademark infringement can be held liable under a theory of secondary liability.  However, this theory simply does not apply where a registrar takes no action other than accepting the registration.”

“The courts have found that knowledge of infringement cannot be imputed to a registrar even after the registrar receives notice of the existence of another party’s rights, in light of the inherent uncertainty with respect to the scope of trademark rights, and the mere assertion by  a  trademark owner  that  a  domain  name  infringes  its  mark  is  not  sufficient  to  impute knowledge of infringement.”

“Moreover, the domain name system is global, while trademark protection is limited geographically.  Neither a registry nor a registrar can be expected to act as the arbiter of regional disputes.  This is why ICANN devised the UDRP.”

The ACPA expressly immunizes both registrars and registries from liability for registration of domain names:

A domain name registrar, a domain name registry, or other domain name registration authority shall not be liable for damages under this section for the registration or maintenance of a domain name for another  absent  a  showing  of  bad  faith  intent  to  profit  from  such registration or maintenance of the domain name.

The courts have confirmed the scope of this immunity, holding that “domain registrars are granted immunity for registering or maintaining a domain name for another.”

“Finally, no court has ever held that a domain, which is a step removed from the registrars, can be held liable for the registration of a domain name incorporating another party’s trademark.   Indeed, at least one court unequivocally has held that in undertaking its function as a registry, a registry operator cannot be held liable for infringement.  That court stated:

“None  of  the  conditions  and  conduct  [for  liability]  would  be applicable to a person functioning solely as a registrar or registry of domain names. . . . Congress did not cause a defendant as a domain name registrar, or as keeper of the registry, to be subject to civil liability under Section 1125(d). . . . The reason the UDRP was developed was to provide the mechanism to resolve these disputes. Not  only  would  imposing  plaintiff’s  scheme  render  the  UDRP nugatory, it would cause the domain name system in its entirety not to be feasible.

“It should be abundantly clear from the above that the planned operations of the Registry are lawful, non-discriminatory and in accord with ICANN policies.”

“We hope that the above clarifies the situation for many in the community and we look forward to a successful Launch in September.”